Ocado reported a slowdown in sales growth in the third quarter today as the Diamond Jubilee and Olympics impacted sales. Chief executive Tim Steiner tells Retail Week how Ocado is tackling price perception issues and why Tesco boss Philip Clarke is playing into his hands.

How did you find the last quarter? What was the impact of the Olympics?

We thought it would be an interesting quarter. We said the Jubilee cost us 1% to 1.5% of sales growth so that accounts for the difference in growth rate. We do not know how the Olympics did because it was quite erratic week to week. It’s much harder with the Olympics than the Jubilee to work out the impact. We are not Tesco where your business is quite predictable, there are so many factors that affect our business. On a personal level, I enjoyed the Olympics and Paralympics. I’m pleased that it’s all over now though.

How is your new Low Price Promise, which is being trialled in Manchester, performing?

We are very pleased with the progress and the response we have had. We have actually now extended it in the last week and a half into an area serviced by our Bristol and Oxford spokes. That area represents about 15% to 20%of our business.

If you are price matching Tesco, is Philip Clarke the most important person to your business?

We are working on price perception so people do not see us as a premium service. We have the best service solution. The Low Price Promise has corrected that price perception and we now have a strong price reality. Philip Clarke is telling everyone that the high street is dead and long live the new high street, which is apps. We created that high street. More than 25% of our business is through apps. Clearly as we price guarantee against Tesco it is very important to us but we are confident that our models supports this.

What do you make of Sainsbury’s online model?

I think its model is deeply flawed. Store picking means you have no understanding of stock availability. Their user interfaces are behind the curve. Justin King has never been a believer in online. He contemplated shutting online down after taking the role. He has never invested much capital in it. None of [the other grocers] put out audited numbers, we are the only ones. The question is where will the market be in 10 to 15 years’ time.

How is the project to open your second customer fulfilment centre in Warwickshire progressing?

It’s on time and will open in the first quarter of next year. We have completed all the major building and are heavily into the testing phase. We are also going to open another site in Welwyn [Hertfordshire] dedicated to non-food. It is much smaller than Dordon [Warwickshire], it’s 80,000 sq ft against 360,000 sq ft over four levels. We will open it in the first half of next year and it will have slow moving non-food ranges, which will include some of the pets, health and beauty and household products.

How are you feeling about Christmas?

Christmas is always a nervous time as a grocery retailer. There’s limited upside as we always sell Christmas out. We need to make sure we do the best for our most loyal customers and make sure they get the best slots rather than those new to the Ocado revolution. We are not like other grocers who take an old Soviet Union politburo approach and delete comments on forums [about Christmas deliveries] when things go wrong. However, we will have a very good Christmas. We’ve increased our range by 30% and it will be increased by 50% by Christmas. If you could give me 2,000 more drivers and switch on Dordon now I’m confident we could sell out Christmas.

How long do you expect aggressive vouchering in grocery to continue?

I don’t know how long it will last but it is unsustainable. Offering money-off vouchers is a good way to win customers from other retailers but when they’ve shopped with you three or four times they become your shoppers and offering them 20% off each time long term is not viable.